GAO studies DB pension plans sponsored by DOD contractors

The U.S. Government Accountability Office (GAO)  recently conducted a study of U.S. Department of Defense contractors and the defined benefit pension plans they sponsor.

According to the GAO it conducted the study because DOD contractors are the largest sponsors of defined benefit pension plans in the United States and pension costs are factored into the price of DOD contracts. The GAO set out to discover how contractor pension costs are determined; how the DOD ensures the contractor pension costs it pays are appropriate; how DOD contractors’ plans compare with plans sponsored by similar companies; how pension costs have affected DOD contract costs; and the factors that contributed to these pension costs and how the harmonization of cost accounting standards (CAS) with ERISA will affect the amounts DOD will pay in pension costs in coming years.